Schroeder's party loses in state elections

Published: Tuesday, September 07, 1999

BERLIN {AP} Chancellor Gerhard Schroeder faced a stronger opposition Monday after losing two state elections, but the changed political landscape could actually help the centrist leader push through unpopular welfare cuts over the protests of leftists in his own party.

Despite the poor showing in Sunday's voting, Schroeder and other reformists in his Social Democratic party insisted on sticking with plans for drastic budget cuts next year, which he argues will spur the economy.

"We have no reason to veer from our program," said Schroeder, defending his plan as "socially balanced as well as economically sensible."

Schroeder, who took over as party chairman early this year, also moved to tighten his control over the party by announcing that a close ally, Transport Minister Franz Muentefering, would take over day-to-day management immediately.

Muentefering was to become general-secretary after a party congress in December, but Schroeder said the current manager, Ottmar Schreiner, agreed to step down now to clear the way. Schreiner was closer to the former party chairman, left-wing standard bearer Oskar Lafontaine, who quit in March. A new transport minister would be named next week, Schroeder added.

Sunday's elections gave the opposition Christian Democrats control over the state government in tiny Saarland, near the French border, for the first time since 1985, and also forced the Social Democrats to seek a coalition partner in eastern Brandenburg state.

Schroeder, who won office a year ago by appealing to a "new center," has had a tough time winning his party's traditional left-wing over to his "modernizing" course.

The party's old guard has attacked Schroeder's plans to trim the welfare state and provide corporate tax relief, calling them socially unjust. Party leaders said the weeks of public bickering turned off voters.

With the conservative Christian Democrats now better positioned to block government programs in parliament's upper house, Schroeder may be able to stifle the dissent in his own ranks by saying he has no choice but to pursue centrist policies.

"In a way it may be easier on Schroeder with the (Christian Democrats) than without," said Erwin Schuech, a political analyst who teaches at Cologne University. "Each party can blame the other for not having the ideal solution."

Finance Minister Hans Eichel insisted Monday he would not retract any of the cuts proposed for next year's budget, totaling about $16 billion, and called for Social Democrats to close ranks behind the government.